Fair Attorney’s Fees in Medical Malpractice Actions

Many victims of medical malpractice who see an attorney may wonder whether a proposed fee agreement is fair.

Across the country, standard attorney’s fee contingencies in medical malpractice cases range from 33% to 40% of gross or net recovery, and higher contingency fees are not uncommon. Plaintiff’s attorneys have long reasoned that medical malpractice cases are especially expensive and particularly risky. Additionally, medical malpractice cases often involve complex issues and require an attorney to have a background in medical issues and an ability to find and work with medical experts.

In Nevada, the medical malpractice insurance industry recently took matters into its own hands and managed to push a broad ballot initiative into law that slashed attorney’s fees in all Nevada medical malpractice cases. While arguably of benefit to medical malpractice plaintiffs, the law has had the intended consequence of forcing many attorneys into other areas of practice. Hence, there are now fewer medical malpractice attorneys in Nevada than there were two years ago, and in many parts of Nevada there weren’t an abundance of medical malpractice attorneys to begin with.

So what does the new law do to attorney’s fees?

N.R.S. 7.095 now provides a convoluted scheme for attorney compensation in medical malpractice cases and provides:

7.095. Limitations on contingent fees for representation of persons in certain actions against providers of health care

1. An attorney shall not contract for or collect a fee contingent on the amount of recovery for representing a person seeking damages in connection with an action for injury or death against a provider of health care based upon professional negligence in excess of:

(a) Forty percent of the first $50,000 recovered;
(b) Thirty-three and one-third percent of the next $50,000 recovered;
(c) Twenty-five percent of the next $500,000 recovered; and
(d) Fifteen percent of the amount of recovery that exceeds $600,000.

2. The limitations set forth in subsection 1 apply to all forms of recovery, including, without limitation, settlement, arbitration and judgment.

3. For the purposes of this section, “recovered” means the net sum recovered by the plaintiff after deducting any disbursements or costs incurred in connection with the prosecution or settlement of the claim. Costs of medical care incurred by the plaintiff and general and administrative expenses incurred by the office of the attorney are not deductible disbursements or costs.

4. As used in this section:

(a) “Professional negligence” means a negligent act or omission to act by a provider of health care in the rendering of professional services, which act or omission is the proximate cause of a personal injury or wrongful death. The term does not include services that are outside the scope of services for which the provider of health care is licensed or services for which any restriction has been imposed by the applicable regulatory board or health care facility.
(b) “Provider of health care” means a physician licensed under chapter 630 or 633 of NRS, dentist, registered nurse, dispensing optician, optometrist, registered physical therapist, podiatric physician, licensed psychologist, chiropractor, doctor of Oriental medicine, medical laboratory director or technician, or a licensed hospital and its employees.

Prospective medical malpractice clients often ask me about attorney’s fees and my answer is always the same: attorneys in Nevada are now regulated by law and all attorneys are limited, by statute, with respect to what they can charge.

You can find other statutes of interest at http://www.leg.state.nv.us/law1.cfm